What to Watch in the Week Ahead and on Monday, Dec. 8

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WEEK AHEAD
Markets are starting to slowdown, with major averages seeing smaller day-to-day moves as trading
declines, but investors are inclined to retain a bullish view, particularly after strong jobs
data. The jobs report has pushed short-dated yields higher, but the expectation is still that
the Federal Reserve will begin to raise rates slowly next year. The overall view of an economy
that is accelerating should continue to help U.S. assets, particularly stocks and the dollar,
which is still rallying.
Photoshop maker Adobe Systems will report fourth-quarter results on Thursday, with profits
expected to beat estimates, according to Thomson Reuters StarMine. Adobe has been switching to
web-based subscriptions for its Creative Suite 6 from traditional box licenses to attract
predictable recurring revenue. Investors and analysts will be interested to see if the company,
whose products are some of the most pirated in the world, can manage to persuade customers, such
as individuals and small businesses, to make a switch to the cloud.
The U.S. Federal Reserve will meet on Tuesday to propose extra capital standards for the eight
largest and most risky U.S. banks. The surcharge will take into account the degree to which the
banks rely on wholesale funding. The rules will be in line with the global Basel III capital
plan, but may well go over and above it. The banks affected are Bank of America, Bank of New
York Mellon, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, State Street and Wells Fargo.
Auto parts retailer AutoZone reports first-quarter earnings on Tuesday. The company's results
have taken a hit this year as more Americans chose to buy new cars over fixing old ones. U.S.
automakers reported their best November sales pace since 2003 on top of strong October sales,
suggesting AutoZone may report another weak quarter. Investors will be looking for sentiment
going into next year and whether AutoZone expects another severe winter to boost results in the
February quarter.
United Technologies Corp is set to speak to investors at its annual outlook meeting on Thursday,
less than a month after its chief executive abruptly retired. New CEO Greg Hayes, who until
recently served as CFO, is expected to lead the meeting in his public debut in his new role.
Aside from the company's earnings projection for next year, Wall Street will be eager to hear if
the company may embark on a different strategic direction under Hayes' leadership.
Marianne Lake, chief financial officer of JPMorgan Chase & Co speaks at an investor conference
on Wednesday. Marianne Lake may update the company's outlook for the fourth quarter.
LPL Financial Holdings Inc, one of the five biggest retail brokerage firms by number of
financial advisers, presents the company's outlook for 2015 on Wednesday. The CEO of LPL
Financial will discuss the company's regulatory problems, market share opportunities and
outlook. As the biggest "independent" broker/dealer - firms whose brokers contract for products
and services but are not full-time employees - LPL is a benchmark for the fastest-growing sector
of the securities industry.
RadioShack Corp reports third-quarter results on Thursday. The struggling electronics retailer
is working to cut costs and shore up financing to stay afloat, as it loses market share to
online rivals. The company will stop matching employees' retirement-fund contributions and
review health benefits to help cut costs, Bloomberg reported. Its discussions to seek approval
from lenders to shut 1,100 stores have hit a rough patch, with lender Salus Capital accusing it
of breaching covenants, which the company denied. Investors will look out for company's
confirmation on changes in employees' health benefits and retirement plans, and updates on
discussions with lenders and other cost-cutting measures.
LendingClub Corp, the world's largest online marketplace connecting borrowers and investors, is
expected to raise $692.4 million at the top end of the expected price range of $10-$12 each.
LendingClub, which has facilitated more than $5 billion in loans since its launch in 2007,
counts former U.S. Treasury Secretary Lawrence Summers and former Morgan Stanley Chief Executive
John Mack on its board. At the top end of the expected price range, LendingClub will be valued
at $4.33 billion.
Shares of Alibaba Investment-backed Momo Inc, a Beijing-based provider of mobile chat apps, are
expected to start trading on the Nasdaq on Friday. The company could raise up to $232 million
from the initial public offering of 16 million American depositary shares, expected to be priced
within the range of $12.50-$14.50 each. The company would be valued at about $2.7 billion at the
top end of the IPO price range. Momo's debut follows Alibaba's blockbuster listing on New York
Stock Exchange in September. Alibaba will buy $50 million of Momo's Class A ordinary shares in a
concurrent private placement. Venture capital firm Sequoia is among Momo's shareholders.
Shares of auto parts provider Metaldyne Performance Group Inc are expected to start trading on
the New York Stock Exchange on Friday. The company's initial public offering of 15.4 million
shares could raise up to $323 million at the top end of the expected price range of $18-$21
each. The company would be valued at about $1.4 billion at the top end. Private equity firm
American Securities is selling all the shares in the offering. Metaldyne supplies auto parts to
companies including Ford, General Motors and Chrysler.
Shares of analytics software maker New Relic Inc are expected to start trading on the New York
Stock Exchange on Friday. The company could raise up to $100 million at the top end of the
expected price range of $18-$20 each. The company would be valued at about $922 million at the
top end. Benchmark Capital Partners and Insight Venture Partners are among New Relic's
shareholders.
Shares of analytics software maker Workiva Inc are expected to start trading on the New York
Stock Exchange on Friday. The company could raise up to $108 million from the IPO of 7.2 million
class A common shares, at the top end of the expected price range of $13-$15 each. The company
would be valued at about $593 million at the top end.
Bank of Canada will release its twice-yearly financial system review on Wednesday. This is "a
detailed review of developments in the financial system and an analysis of policy directions in
the financial sector". Bank of Canada Governor Stephen Poloz will hold a news conference where
Senior Deputy Governor Carolyn Wilkins will also be present. On Thursday, Poloz will speak
before the Economic Club of New York.
Statistics Canada releases October data for new housing prices on Thursday. Canada's housing
report is expected to show new home prices edged up 0.2 percent in October. On Friday, the
November Teranet-National Bank Composite House Price Index, which measures price changes for
repeat sales of single-family homes will be released.
Mexico's retail association Antad will release same store sales for November on Tuesday, after
sales at stores open at least a year accelerated by 2.1 percent in October. Also on Tuesday, the
national statistics institute will reveal annual inflation data for November, after inflation
for the twelve months through early November moderated to 4.16 percent but remained above the
bank's 4 percent ceiling. On Wednesday, gross fixed investment data will be released for
September. Data on Friday will show how industrial production fared in October, after slumping
in September thanks to falling oil output and a dip in construction activities despite a pickup
in factory activity.
MONDAY, DECEMBER 8
Federal Reserve Bank of Atlanta President Dennis Lockhart speaks on economic outlook and
monetary policy before the Council for Quality Growth (1230/1730).
McDonald's reports November same-store sales data. McDonald's investors are hoping the chain's
weak same-restaurant sales will bottom. The world's biggest fast-food chain, which is struggling
to appeal to more health-conscious diners, has been fighting tough U.S. competition, the
after-effects of a supplier scandal in Asia, and economic and political turmoil in Europe.
UBS hosts Global Media Conference from December 8 to 10. Several media heavyweights will be key
noting and presenting including James Murdoch, co-COO of 21st Century Fox, Time Warner CEO Jeff
Bewkes, WPP's Martin Sorrell, New York Times CEO Mark Thompson, CBS CEO Les Moonves, and News
Corp's Robert Thomson.
Housing data of Canada is starting with two separate reports on housing starts and building
permits. Housing starts are forecast to pick up to 200,000 in November, suggesting the housing
market remained robust heading into the end of the year (0815/1315).
Euro zone finance ministers will discuss the European Commission's assessment of their national
draft 2015 budgets with focus on the EU executive's decision to postpone any action against
France or Italy over their insufficient fiscal consolidation until early March 2015.
(Compiled by Astha Rawat in Bengaluru; Editing by Siddharth Cavale)